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2005

Deloitte Touche Tohmatsu (DTT) has released its 2005 worldwide member firm review, which reports aggregate member firm financial results for fiscal 2005 and also articulates a new strategic direction for DTT member firms.

The new strategic direction is intended to elevate all of its member firms' businesses to be the standard of excellence, thus strengthening their market differentiation. For fiscal 2005 DTT member firms had aggregate revenues of US$18.2 billion, a 10.9% increase over the US$16.4 billion reported last year. This marks the third consecutive year of double-digit growth from continuing operations. Fiscal 2005 also marked the 12th consecutive year that Deloitte member firms have posted aggregate revenue increases. Click for:

The newsletter reports the decisions made at the November-December 2005 meeting of the International Public Sector Accounting Standards Board (IPSASB). The IPSASB replaced IFAC's Public Sector Committee (PSC) in November 2004. It develops standards for accounting and financial reporting by national, regional, and local governments and related governmental agencies. Those standards are generally based on IFRSs, and profit-oriented government business enterprises are required to comply directly with IFRSs. The IPSASB's current work programme includes an ongoing project on 'Convergence with International Financial Reporting Standards (IFRSs) issued by the IASB'. One IPSASB convergence issue relates to IFRIC's project on accounting for Service Concessions (public-private partnerships). Because IFRIC's draft Interpretations do not address accounting by grantors of service concessions, the IPSASB will work with national standard setters to explore the potential for coordinating national and international guidance on accounting by public sector entities involved in service concession arrangements. Click:

The report contains 2004 pension assumption data for 356 companies in 25 countries. 82% of the survey participants report under FAS 87 Employers' Accounting for Pensions; 11% under IAS 19 Employee Benefits; 6% under FRS 17 Retirement Benefits (UK and Ireland); and the remaining 1% percent under other national standards. The US retirement plan data on FAS 87 assumptions is derived from information reported in corporate annual reports. The non-US information was collected using a survey form. The report includes tables showing by country, among other things:

Background economic data - Bond yields and CPI+.

Discount rates are used to calculate the present value of pension obligations and the service and interest
cost portion of pension expense.

Expected rates of return on assets.

Salary increase assumptions.

Spread between the average discount rate and salary increase by country.

Estimated social security increase, in those countries where the plan formula takes into account social security.

Estimated pension increases, in those countries where either pensions are required to increase or there is a substantive commitment to provide increases.

Whether pension assets are measured at 'market value' or 'market-related value' (the latter reflecting a smoothing of the value of assets over a period up to five years).

Average asset allocation.

Funded status based on projected benefits and also accumulated benefits.

The report may be purchased from www.watsonwyatt.com then click 'Research' then 'Research Reports'.

The International Federation of Accountants has begun a search for a new full-time chairperson of the International Auditing and Assurance Standards Board effective 1 January 2007. The current chairman, John Kellas, has decided not to seek reappointment when his term ends on 31 December 2006. Click for IFAC Announcement (PDF 82k).

The following meetings are scheduled for January:
9-10 January 2006 Financial Instruments Working Group
12-13 January 2006 Insurance Working Group
30-31 January 2006 Working Group on Small and Medium-sized Entities
All of the meetings are in London.

In our news story of 14 December 2005 we posted a special edition of Deloitte's Heads Up newsletter summarising the accounting highlights of the SEC and PCAOB Conference sponsored by the American Institute of CPAs, held 5-7 December 2005 in Washington.

The European Commission has published the amendment of IAS 39 for Cash Flow Hedge Accounting of Forecast Intragroup Transactions in the Official Journal of the European Union, making it fully endorsed for use in Europe.

We have updated the following agenda project pages to reflect the discussions and decisions at the December 2005 meeting of the International Accounting Standards Board:
Accounting Standards for Small and Medium-sized Entities
Conceptual Framework
Fair Value Measurement
Financial Instruments Puttable at Fair Value
Insurance Contracts
Joint Ventures
Short-term Convergence – Income Taxes
.

We have updated the following agenda project pages to reflect the discussions and decisions at the December 2005 meeting of the International Accounting Standards Board:

The European Commission's Internal Market Directorate has invited public comment on future priorities for the Action Plan on the Modernisation of Company Law and Corporate Governance.

Comment deadline is 31 March 2006. While the issues addressed in the consultation generally do not relate to accounting, the following point is noted regarding a study on the implications of IFRSs on profit distribution:

On 13 August 2005, the Commission published a call for tender for a feasibility study on alternative to capital maintenance regime as established by the Second Company Law Directive and the examination of the implications of the new EU-accounting regime on profit distribution. The terms of reference of the feasibility study will be re-examined by the members of the Advisory Group on Company Law and Corporate Governance and a further call for tender will be published in early 2006.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.

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